Now, two entrepreneurs who say they advised Susquehanna on early investments in China claim the firm cut them out of their share of ByteDance’s huge success. In a lawsuit filed quietly in Montgomery County in November, the former consultants allege that they helped secure a stake in search-engine technology that would later power the video-sharing app TikTok and other sites, and that Susquehanna hid the connection from them for years.
Susquehanna is a high-speed trading firm that has cultivated a portfolio of private-equity and venture-capital investments, including about $3.5 billion it has put into more than 300 companies in Asia, according to its website. The lawsuit offers a rare public look at the privately held firm’s origins in China.
“This case is about two young professionals who agreed to take significant financial and professional risk to start one of the first U.S.-backed private equity businesses in China,” according to the complaint filed in the Montgomery County Court of Common Pleas. “The business became wildly successful, including securing a significant stake in one of the most valuable ‘unicorns’ in history, ByteDance, the owner of TikTok. Yet plaintiffs were lied to and denied the share of the profits to which they were contractually entitled.”
In their telling, Tan and Zhang began advising Susquehanna on China ventures in the early 2000s when there was “very little” American investment in the country. Zhang, who started a company to find deals “exclusively” for Susquehanna, the suit claims, and Tan, who was a lawyer with a large firm in Hong Kong, both worked on Susquehanna’s first China private-equity investment — a hotel chain that later went public.
